Question

Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:

MONTH	DEMAND (UNITS)
January	4,190
February	4,290
March	3,990
April	4,390
May	4,990
June	4,690
July	5,290
August	4,890
September	5,390
October	5,690
November	6,290
December	5,990

a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.7. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Month	Forecast
January
February
March
April
May
June
July
August
September
October
November
December

b. To be reasonably confident of meeting demand, Nina decides to use 2 standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?(Do not round intermediate calculations. Round your answer to the nearest whole number.)

Additional units            

Answer 1

MONTH	LAST YEAR DEMAND UNITS	(a) FORECAST	(b) ADDITIONAL UNITS
January	4190	6285	2095
February	4290	6435	2145
March	3990	5985	1995
April	4390	6585	2195
May	4990	7485	2495
June	4690	7035	2345
July	5290	7935	2645
August	4890	7335	2445
September	5390	8085	2695
October	5690	8535	2845
November	6290	9435	3145
December	5990	8985	2995

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